The undervaluation of corporate reputation as a supplier selection factor: An analysis of ingredient branding of complex products in the manufacturing industry

• Reputation, as a supplier selection factor, is undervalued in previous research.
• A buyer’s reputation is affected by its supplier’s prestige in the area of complex products.
• A supplier with a high prestige will increase the reputation of the buyer.
• A supplier with a low prestige will decrease the reputation of the buyer.
• 12 sets with varying supplier/buyer reputations and ingredient relevance were analyzed.

Prior research studies on supplier selection factors assess vendor reputation as a low ranked criterion. Reputation in these articles, however, only refers to the position in the industry, without considering the role of the final customer. Our results from a survey with 565 individuals suggest that the end user as a stakeholder should be also considered when analyzing a vendor’s prestige. We demonstrate that a supplier’s standing has negative as well as positive reputational effects on the buyer. Depending on the relevance of the purchased good as well as the reputation of the supplier and the buyer, low/high-ranked ingredients significantly decrease/increase the final customer’s perception of the buyer.